Pearce's Cricket Farm issued a year, semiannual bond years
ago. The bond currently sells for of its face value. The company's
tax rate is
Suppose the book value of the debt issue is $ million. In addition,
the company has a second debt issue on the market, a zero coupon
bond with years left to maturity; the book value of this issue is $
million and the bonds sell for of par. Assume the par value of the
bond is $
What is the company's total book value of debt? Enter the answer in
dollars. Omit $ sign in your response.
Total book value
What is the company's total market value of debt? Enter the answer
in dollars. Omit $ sign in your response.
Total market value
What is your best estimate of the aftertax cost of debt? Do not
round intermediate calculations. Enter your answer as a percentage
rounded to decimal places.
